Irish firms hit takeover trail in 2004

MERGERS and acquisition deals involving Irish companies soared in 2004 to €10.4 billion, up 33%.

Statistics compiled by corporate finance specialists, Ion Equity show that while the value of deals rose substantially in 2004, the actual number of deals was down from 252 in 2003 to 190 in 2004, a decrease of 25%.

“The average deal size increased from €31 million to €50 million in 2004 and the fourth quarter was the most active period of the year.

“The most active sectors in 2004 were leisure and travel (16%), food and food service (11%), financial (18%) and industrial (15%) recorded significant increases over 2003,” according to Ion director Joe Devine.

And Mr Devine believes activity will continue to accelerate as he expects the generally favourable outlook to stimulate further merger and acquisition activity and Irish small and mid-cap companies will become increasingly active.

“In terms of major sales of Irish assets, the financial services sector will continue to attract the attention of aggressive British and European buyers, following the lead of Danske Bank with its acquisition of the NAB banks.

“The weak dollar, high oil prices and some slowdown in China are all very major worries but overall we believe that Ireland remains relatively well positioned to continue the trend of wealth creation and the trend of being a net acquirer of assets across many sectors in an active corporate market,” the corporate finance specialist said.

Mr Devine believes that serial acquirers CRH and Kerry Group will announce more acquisitions.

“Ireland continues to be a major buyer of assets in the food and construction industries.

“CRH and Kerry Group maintained their acquisition strategies and combined spent more than €1.3 billion on acquisitions.

“Expect to see more of the same when acquisition activity by both companies for the second half of 2004 are released early in the new year,” he said.

Mr Devine said the 10 largest deals in 2004 accounted for more than two-thirds of the total spend.

“These deals included Danske Banks recent acquisition of NAB’s Irish operations, Quinlan Private’s acquisition of the Savoy Group in London, Smurfit’s sale just before Christmas of its Munksjo business in Scandinavia, Kerry’s purchase of Quest from ICI, Barchester Healthcare’s acquisition of Westminister Healthcare, CRH’s acquisition of Secil, Grafton’s deal with Heiton, the sale of All Clad by Waterford Wedgwood, the secondary buyout of Clondalkin, Tullow’s acquisition of Energy Africa and the recent North Sea acquisitions from Shell & Exxon Mobil,” he noted.